Taiwan's ruling party in crisis as China factor looms large

TAIPEI (Reuters) - Taiwan’s ruling Kuomintang (KMT) party is struggling to convince voters of the benefits of the deeper ties with China it has championed, senior party figures said, after a poll drubbing left it facing its biggest crisis in more than a decade.

President Ma Ying-jeou formally resigned as chairman of the KMT on Wednesday to take responsibility for the poor showing in local elections, which took place against the backdrop of protests in Hong Kong against China’s interference in the territory’s political system.

“We failed to meet people’s expectations,” Ma, who will remain president until the end of his second and final four-year term in 2016, told KMT members, bowing in apology. The party later named Vice President Wu Den-yi as acting party chief until it elects a new chairman around January.

The bout of soul-searching within the Kuomintang in the wake of the defeat has left the self-governing island’s government and parliament in disarray, and raised concerns that trade ties with China will stall.

The KMT, whose leaders fled to Taiwan in 1949 after defeat to Mao’s Communists in China’s civil war, suffered worse-than-expected electoral losses at the weekend, including in its traditional strongholds Taipei and Taichung, in central Taiwan.

“It is impossible that the elections were not affected by cross-strait ties and the Hong Kong Occupy Central protest,” said KMT spokesperson Charles Chen.

“One message voters were sending loud and clear was their fears about the economic ties across the Taiwan Strait.”

For the KMT, or Nationalist party, it was the worst setback since 2000, when it lost power for the first time to the Democratic Progressive Party, which favors formal independence for the island Beijing considers a renegade province.

Cross-strait trade ties have been warmer than ever since Ma took office in 2008, when the KMT regained the presidency.

More than 20 trade deals, including the establishment of the first direct flights between the two sides, have been inked. Earlier in 2014, Chinese and Taiwanese officials held their first official meeting in Taipei since 1949.

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TOO CLOSE TO BEIJING?

But not everyone on the democratic island is comfortable with the with closer links to Beijing, which has never renounced the possibility of using of force to take back the island.

In March, students occupied the Taiwan legislature in a bid to block passage of a service trade deal that would have allowed for freer trade with China.

The protests, dubbed the Sunflower Movement, fed off fears the pact would give China greater sway over Taiwan. The protest ended when parliament agreed to suspend a review of the bill.

“The KMT policy toward China is right. I don’t think it is getting too close to China,” said Hsu Hsin-ying, member of the KMT central standing committee, adding that the party’s China policy fitted with the need for Taiwan to “go global”.

What the KMT had done wrong was to not effectively communicate and educate the public about its policies, said Hsu, a KMT member since 2008 and a central standing committee member for two years.

Party spokesman Chen said the KMT would re-evaluate its China policy.

“The election result has unavoidably impacted Taiwan-China relations,” he said. “But regarding the direction and adjustment of China policy going forward, we will still have to study.”

Taiwan’s premier and cabinet stepped down in the days following the election defeat, leaving party lawmakers shell-shocked and despondent.

“Recently I’ve been tired and I’ve been in a bad mood,” said Alex Fai, a senior KMT member and lawmaker. The legislative committee session he hosted earlier on Wednesday was cut short because of the lack of a government.

Vice Premier Mao Chi-kuo was appointed as island’s new premier later on Wednesday.

Some members said the KMT had been punished because it was seen as the party that represented power and wealth.